Russian President Vladimir Putin took part in the projects’ inauguration ceremony in the teleconference mode.

The projects delivered aim at linking new fields in the Yamal-Nenets Autonomous District and Krasnoyarsk Region with resource potential standing at 2 billion tonnes of crude to the system of oil trunk pipelines of the Russian Federation, ensuring oil transportation to Russian refineries, increasing the potential of export deliveries as well as diversification of Russian crude supply routes in the direction of Asia Pacific markets.

The Zapolyarye – Purpe and Kuyumba – Tayshet oil pipelines are unique projects, with newest construction technologies and methods used in their erection. The pipelines were designed with due regard for the challenging oil transportation environment and geotechnical survey specifics. Two laying methods were used: underground and aboveground – using special supports with heat stabilizers. Earlier on Transneft did not use the aboveground method of building trunk oil pipelines in such weather conditions.

The oil pipelines were built in an extremely challenging natural and climatic environment. More than 50% of the territory where the oil pipelines are laid is described as perennially frozen ground, with 70% of the terrain being swamped and waterlogged. The construction was further complicated by significant temperature drops and the lack of roads as well industrial or other infrastructure.

In the process of building oil trunk pipelines all industrial and environmental safety requirements were met. The pipelines were laid outside of specially protected natural reservations and the sites of traditional use of natural resources by low-numbered indigenous people of the North.

As part of implementing Zapolyarye – Purpe and Kuyumba – Tayshet projects, Transneft conducts large-scale work of developing social infrastructure in the Arctic. Along with transportation routes, the Company created about 2,500 jobs and built eight apartment buildings with the total area of 19,450 sq. m, three daycare centers, two schools and two sports facilities. It also erected 7 new bridge crossings, about 772 km of route roads, 771.8 km of external power supply networks and other modern utility grids, including sewage treatment facilities and heating boilers.

2 billion tonnes of crude – the resource potential of the fields hooked up to the oil pipeline.

Crude oil will be fed from the new fields in Yamal-Nenets Autonomous District and the north of Krasnoyarsk region, Messoyakhskoye (Rosneft, PJSC, Gazprom Neft PJSC) and Urengoyskoye (Gazprom) groups of fields as well as the field in Bolshekhetskaya Depression (Lukoil, PJSC).

The construction of the Zapolyarye – Purpe – Samotlor pipeline system (1,000 km) commenced in accordance with Decree #635-r of the Russian Federation Government, dated 22 April 2010. The southern part of the Purpe – Samotlor trunk pipeline (429 km) was built during 18 months and commissioned in October 2011.

The Zapolyarye – Purpe section was built during the next 4 years, with about 8,000 workers and 2,500 units of heavy road vehicles involved.

Environment

Swamped and waterlogged portions of the trunk pipeline account for 70% of the territory, the oil pipeline crossing 160 water courses, including big rivers such as the Taz and Pur.

The route runs from north to south. The initial upstream point – the pipe-end oil pump station (PEPS) Zapolyarye (170 km beyond the Polar Circle) – is located in the area of the Pyakyakhinskoye oilfield. The terminal downstream point is the line operation dispatcher station (LODS) Pur-Pe of the Noyabrsk Trunk Oil Pipelines Directorate.

Innovations

The Zapolyarye – Purpe oil pipeline is a unique project including state of the art construction methods and innovative Russian technologies.

170 km of the pipeline are laid beyond the Polar Circle;

315 km of the pipeline are laid above the ground on special supports;

the oil pipeline is equipped with an up-to-date leakage detection system;

oil heating stations are erected along the entire route: because of the high oil viscosity, it needs to be heated to 60 C0;

The service life of the pipes without replacement and revamping has increased to 50 years (30 years on average).

While working on this project Transneft secured rights to 22 invention patents and 15 patents for useful models.

Ecology

Among the key priorities of the project is conservation of the arctic nature in its pristine and unadulterated condition. Unique structures of the supports, using the temperature stabilization of permafrost soil, novel heat insulation materials allowing the heated oil to be transported hundreds of miles through the tundra without any negative environmental impact are just a small part of advanced scientific developments enabling a safe and reliable operation of the trunk oil pipeline in Arctic conditions.

Social responsibility

As part of the “Pipeline System Zapolyarye – Purpe” project, Transneft puts large-scale effort in the development of social infrastructure in the Arctic. Along with the new transport trunk pipeline, local residents will get new jobs, apartment buildings, a nursery school, a sports facility, new roads, up-to-date utility grids.

Under construction in the area of the Tazovsky community is a new solid waste landfill site. A bridge over the Nadym River in the Nadymsky District has already been commissioned. The construction of another bridge crossing over the Pur River in the Purovsky district will reportedly be launched soon.

Meeting the requests of the indigenous population of the North, Transneft made the decision to build a hatchery for the breeding of young fish of valuable species in the Tazovsky District and thus boost the development of traditional Nenets livelihoods.

As part of the annual charitable programme, Transneft Siberia, JSC provides financial support for social and religious organizations in Yamal.

The commissioning of oil pipeline facilities will result in the creation of over 1,500 new jobs in the region.

Starting in 2017 the local budget will annually receive RUB 3 billion of tax proceeds.

Kuyumba – Tayshet Pipeline System

Project goal

The feeding of crude to the system of Transneft oil trunk pipelines from the new Kuyumbinskoye and Yurubcheno-Tokhomskoye fields for its further delivery to Komsomolsk and Khabarovsk refineries of Russia and abroad.

Grounds

The project has been implemented on the ground of Russian Government Decree #532-r, dated 17 April 2012, about the design and construction of the trunk oil pipeline from the Kuyumbinskoye and Yurubcheno-Tokhomskoye fields in Krasnoyarsk Region over the route: Kuyumba settlement (Evenkiysky District of the Krasnoyarsk Region) – “Tayshet of the Eastern Siberia – Pacific Ocean Pipeline System” (Tayshetsky District of the Irkutsk Region) pipe-end pump station.

General information

The capacity of the trunk oil pipeline is up to 15 million tonnes per year, including:

the first stage – 8.6 million tonnes per year – 2016;

the second stage – 15 million tonnes – 2023;

The length of the Kuyumba – Tayshet oil trunk pipeline is 697 km. The route runs over the territories of Evenkiysky, Boguchansky and Nizhneingashsky Districts of the Krasnoyarsk Region as well as Tayshetsky District of the Irkutsk Region (505 km over the Krasnoyarsk Region and 192 km over the Irkutsk Region).

External power supply: owned HVL-110 kV having the extension of 326 km, three distribution stations 110/10 kV with the aggregate capacity of 25.6 MW.

The construction timeline: the first joint of the oil pipeline was welded on 17 December 2013; the facilities are due to be commissioned in December 2016.

Construction specifics

The construction was carried out in challenging natural-climatic conditions, underdeveloped or lacking industrial and other infrastructure; the construction was further complicated by significant temperature drops, the lack of roads, numerous swamped and waterlogged areas as well as permafrost soils.

The route of OTP Kuyumba – Tayshet crosses 90 water barriers and three big rivers, including the river Angara (its width exceeding 1.5 km at the crossing point).

A 332-km route road as well as 5 bridge crossings was built for the oil pipeline operation.

Social responsibility

During two years Transneft allocated RUB 232 million for the settlement of social problems of people residing in Evenkiysky, Boguchansky and Nizhneingashsky Districts, including for indigenous small-numbered peoples of the North:

houses in Ekonda, Essey, Chirinda and Yukta settlements were built;

housing was purchased for orphan kids of Tura settlement;

housing was purchased for specialists from among the indigenous small-numbered peoples of the North in Vanavara settlement;

an ethnographical open-air camp and museum was built in Tura settlement;

co-financing of construction of an elementary/nursery school in Kuyumba settlement, fitness and wellness centre in Tura settlement (Evenkiysky District), gym in Novokhaisky settlement and daycare in Angarsky settlement (Boguchansky District).

For the sake of operating the Kuyumba – Tayshet trunk oil pipeline 800 new jobs were created.

Apartment buildings were built for workers of Transneft divisions in Oktyabrsky and Angarsky settlements. Overall more than 11,100 sq. m of housing were added to the residential stock of the region.

The Kuyumba – Tayshet project gives an impulse to the development of local enterprises, with more than 70 local contractors involved in the construction of facilities.

Starting in 2017 more than RUB 1.5 billion rubles of annual tax proceeds will be flowing into the regional budgets (of the Irkutsk and Krasnoyarsk Regions).